Study: AL pensions help sustain Alabama's economy

The more than $25 billion worth of pension funds that are administered by the Retirement Systems of Alabama help to support more than 36,000 jobs in Alabama. That's according to a new study.

The National Institute on Retirement Security examined each state's pension funds to see how the taxpayer funded contributions translate into consumer spending on behalf of retirees and active pensioners.

"It shows that there's a multiplier of 7.79 for each dollar paid by taxpayers into pension funds in Alabama," said Leura Canary, RSA's Chief Counsel. "They get 7.79 worth of economic impact for that dollar."

But one of the state's economists isn't sold on the study.

"The methodology worries me," said Dr. Keivan Deravi, a professor of economics who has also helped to recruit companies like Mercedes-Benz, Airbus, and Hyundai to Alabama.

Deravi says you can't look at money that's already being circulated in Alabama as a way to measure economic impact because one way or another that money will see some kind of activity in the state.

"There's no question about the fact that the money spent by retirees creates economic impact but that economic impact was originally due to happen at some other point in time," Deravi said.

Canary says the study has value in explaining that pension funds provide consistent value to those who depend on it before and during retirement. Canary added that the design of the RSA's defined benefit plan protects members from the ebbs and flows of international market conditions.

Some states have floated the idea of converting future retirement plans for state employees to those that would more closely resemble 401K plans, which are more susceptible to peaks and valleys in earnings and losses.

"401Ks shift the risk of the market to the individual and so people can't depend on a steady income with a 401K like they can a pension system and so they're more apt to spend and make financial plans based on that steady income," Canary said.

Deravi described the study as a sort of "shell game," comparing the study's results to proving how you can move money from one hand to another.

"The only factor that we have to consider, taking into consideration economic impact, is value added at fresh point. It has to be money that was already not leaked from the system," Deravi said.

A bridge on County Road 12 in Jasper County deemed unsafe by the federal government has already been closed. Photo credit WDAM.

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The cast of "Selma The Musical: The Untold Stories" performed a song for Mississippi native Robin Roberts on the Good Morning America after show Monday and will appear on a live segment of the show on Thursday. (Photo source: Jana Paige Haynes)

A Hattiesburg theater group is in New York this week to perform their independent musical at the National Black Theater. The cast of "Selma The Musical: The Untold Stories" performed a song for Mississippi native Robin Roberts on the Good Morning America after show Monday and will appear on a segment of the show on Thursday. Robin Roberts Writer, producer and director Jana Paige Haynes said the experience in New York has been amaz...

A Hattiesburg theater group is in New York this week to perform their independent musical at the National Black Theater. The cast of "Selma The Musical: The Untold Stories" performed a song for Mississippi native Robin Roberts on the Good Morning America after show Monday and will appear on a segment of the show on Thursday. Robin Roberts Writer, producer and director Jana Paige Haynes said the experience in New York has been amaz...

The Food and Drug Administration said that various gels and creams containing the drug benzocaine can cause rare but deadly side effects in children, especially those 2 years and younger. (Source: FDA)

The US Food and Drug Administration health is warning parents about the risks of teething remedies.

The Golden Eagles will conclude spring drills at noon Saturday with the annual Black and Gold Game at M.M. Roberts Stadium.

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Weather issues have re-arranged the schedule of the 2018 Conference USA Baseball Championship at MGM Park. With four, separate lightning delays pushing Wednesday’s games back by more than 6 ½ hours, only one game of the four scheduled was completed.